Income and Poverty

The many faces of UK poverty

Published: Dec 09, 2013

Author:

Category: Income and Poverty

Yesterday, the Joseph Rowntree Foundation published our annual Monitoring Poverty and Social Exclusion report, tracking changes in poverty across a range of indicators such as low income, unemployment, low pay, homelessness and ill health. This year’s report reveals that almost 13 million people (1 in 5) are living in poverty in the UK. For the first time, the majority of people living in poverty - some 6.7 million people - are in working families. At the same time, the support on offer to people out of work is increasingly inadequate. But our report shows that those in poverty in and out of work are not separate groups – people move between them all the time.

Among those in work, the number of people in low-paid jobs has risen and average incomes have fallen – around 5 million people are now paid below the Living Wage. Low pay may go some way in accounting for the growth in in-work poverty as half of working families in poverty have an adult paid below the Living Wage. The report also found that, for the first time, there are more people in poverty in working families than families not in work. Around 6.7 million people, over half of all those in poverty, live in a family with at least one adult who is working – an increase of 500,000 on the year before.

There have also been big shifts in terms of which groups are experiencing poverty. The pensioner poverty rate, now 14%, has reached its lowest levels in 30 years. A similar trend is apparent when it comes to child poverty – currently at 27%, the child poverty rate is lower than it has been in 25 years. Poverty among all other adults rose over this period, however, with the largest increases in the poverty rate among working-age adults without dependent children. Working age adults without dependent children are now the largest group in poverty - 4.7 million people, the highest on record.

The number claiming Jobseeker’s Allowance (JSA) shows the extent to which people are moving between work and unemployment. Although the number claiming this benefit at any one time has been around 1.5 million since 2009, almost 5 million different people have claimed it at some point in the last two years. This is equivalent to almost 1 in 6 of the UK workforce.

The report also points to the way the social security system is fraying rapidly as increasing numbers are being hit by the falling value of benefits, benefit sanctions, and (often overlapping) welfare reforms. Particularly striking has been the evolution of a punitive sanctions regime that has seen both the number of job seekers referred for sanctions (1.6 million) and the actual number who had their JSA stopped or reduced (800,000) double between 2010 and 2012.

In April 2013, an estimated 2.6 million families (8 per cent of families in the UK) saw their benefit entitlement cut as the result of three welfare reforms (the localisation of council tax benefit, the under-occupancy penalty and the overall benefit cap). Of this number, over 400,000 families were hit by both the under-occupancy penalty and changes to council tax benefit, losing a combined £16.90 per week on average. Two thirds of these families were already in poverty.

The report is not without positive news, however, the most obvious of which comes from the improving job market. The labour market has been stronger in 2013 than a year ago, with both unemployment and the broader underemployment measure falling. The next in our Monitoring Poverty blog series, out tomorrow, will look at whether this recovery can deliver the reduction in poverty on anything like the scale that is needed.